Inflation
Politics 22/06/2022

Sánchez announces a reduction in VAT on electricity from 10% to 5%

The Spanish president defends his government's management of rising prices in the face of criticism from the opposition

2 min
Spanish Prime Minister Pedro Sánchez in a recent image at the Congress.

Madrid"The rise in prices can sweep you and us away", ERC spokesman in Congress, Gabriel Rufián, warned Spanish president Pedro Sánchez, who has been the object of attacks by the opposition over the little effect the executive's measures to curb inflation have had. Faced with this reality, Sánchez has advanced one of the measures the Spanish government will approve on Saturday in an extraordinary cabinet meeting: VAT on electricity will be lowered from 10% to 5%. Previously it had already been lowered from 21% to 10%, but the bill has continued to rise, while waiting for the gas price cap to take effect.

The PP had already called for this cut in VAT, which was then branded as "cosmetic" by third vice-president Teresa Ribera. Neither Sánchez nor the first vice-president, Nadia Calviño, have made any self-criticism, but have taken the opportunity to ask the opposition and the government's partners to support the measure. The effect of some measures approved in the previous royal decree, however, such as the 20 cents per litre fuel subsidy , has not made itself felt when it comes to curbing prices.

The PP moderates its discourse

Inflation is the battering ram of the right-wing opposition against the Spanish government. In the case of the PP, it has undergone a notable change of tone after Juanma Moreno's great victory in Andalusia. PP spokeswoman Cuca Gamarra has left behind the attacks that were common under Pablo Casado's leadership and has defended "a policy of agreement and without insults", provoking laughter from the Socialist benches. As Moreno did on election night, all the PP spokespersons have made the word humility their own, either as one of their own qualities or to denounce the government's alleged lack of it.

Gamarra did, however, take pride in the Andalusian election result. "Andalusians have acted as spokespersons for all Spaniards. Your Frankenstein government project is a failed project. You have not understood anything," the popular spokeswoman told Sánchez. His response, however, shows that the Spanish government will not change course, and in any case will reinforce the ideological clash with the right by deepening social democratic policies. This will mean no tax cuts and greater intervention in markets such as electricity. The government doesn't rule out either that some projects that have for now been set aside, such as the 'historical memory' law, will be revived. Sánchez, therefore, is trying to navigate in the midst of the storm by highlighting his left-wing profile in order to mobilise voters who, as could be seen in Andalusia, are very disenchanted with his executive.

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